Archives for category: Fraud

 

Karen Francisco, editorial page editor of the Fort Wayne Journal-Gazette, is a great defender of democracy, honesty, and public schools. She is a keen observer of the school choice hustle in Indiana, where grifters and entrepreneurs are welcome to rip off the public. Thanks, Former Governor’s Mitch Daniels and Mike Pence, and compliant legislators.

In this editorial, she explains how charter schools and voucher schools evade accountability. One neat gimmick is to change the name of a failing choice School, and the clock gets reset. Presto, Change-O.

She begins:

When Horizon Christian Academy produced some of the lowest standardized test scores in the state in 2015, a spokeswoman for the Institute for Quality Education defended the Fort Wayne school’s poor performance by claiming accountability for Indiana voucher schools is greater than for public schools.

“Traditional public schools as well as public charter schools can receive an F for four consecutive years before the state can intervene,” Erin Sweitzer told The Journal Gazette. “Private voucher schools, however, are required to stop accepting new voucher students after two consecutive years of receiving a D or F.”

What Sweitzer and other voucher proponents don’t acknowledge is the accountability loophole that allows charter and voucher school operators to walk away from a failing school and open shop under a different name – with barely an interruption in the generous flow of state tax dollars. After a D grade in 2015-16, Horizon Christian Academy went on to receive an F for each of the next two academic years. The state prohibited the school from accepting new voucher students last year, but paid $880,000 in vouchers for returning students. That’s on top of the $11.4 million Horizon’s three schools have collected since the taxpayer-funded voucher program began in 2011.

Now, the school’s co-founder has left Horizon and is preparing to open a new faith-based school, Abraham Preparatory Academy.

Tammy G. Henline told The Journal Gazette’s Ashley Sloboda that the school, at Statewood Baptist Church, is planning a “large, public registration soon.” WFFT-TV reported the school will “rely heavily on a virtual curriculum” and is seeking state accreditation, which would make it eligible to receive vouchers.

If the Indiana State Board of Education approves accreditation, it will deliver Exhibit A in the accountability charade supported by voucher proponents.

In the name of parent choice, they ignore policies that allowed the failing Imagine public charter school to reopen as Horizon Christian Academy and for unlicensed educators to earn six-figure salaries overseeing D- and F-rated schools.

Apparently the voters in Indiana don’t care about how taxpayer dollars are wasted.

Mercedes Schneider read the voluminous indictment of the founders of the online charter chain called A3. She describes the counts in the indictment in this post.

She writes:

In this post, I offer excerpts of the 67 counts detailed in the 235-page indictmentof Sean McManus, Jason Schrock, and nine others who used weaknesses in California’s charter school laws to construct a network of fraud and launder $50M in public funds into their own pockets over the course of years. These 11 individuals (and unidentified others) did so by opening multiple charter schools and using companies, both pre-existing and newly-created, to establish a complex system of self-dealing– with little to no education actually happening via those exploited, educational dollars.

The California legislature is currently deciding whether and how to reform the state’s charter law. The California Charter School Association is fighting any accountability or reform of the law. If a theft of more than $50 million by charter vultures doesn’t persuade the legislature of the need for reform, nothing will.

Bring on more theft of public money! More millions scooped up by entrepreneurs and grifters!

Thanks, Reed Hastings, Eli Broad, Bill Bloomfield, the Fischer family (the Gap and Old Navy), the Walton family, and all the other billionaires who make this piracy possible and who fund the CCSA!

Why spend money on public schools when it can go right into the bank accounts of smart and savvy entrepreneurs?

 

Attention Editors of U.S. News & World Report!

Gina Caneva teaches in a high school in Chicago that received a high ranking from U.S. News & World Report, but she is not happy. 

She knows the rankings are destructive nonsense. They are a fraud.

I began teaching 15 years ago at Corliss High School in the Roseland community on the Far South Side. Then and now, the school’s student body is nearly entirely African American, and 90% are termed “low income.” Currently, U.S. News and World Report states that Corliss is in between 430-647 in their rankings, CPS gives it a Level 2 rating and the Illinois Report Card designates it as a lowest performing school. Although I don’t have the numbers from 15 years ago, without a doubt these rankings would have been similar as I remember it being a school “on probation.” This meant that it could be closed.

But inside, it was neither a school on probation nor a failing school. Teachers worked together to prepare a rigorous curriculum that engaged students at many different skill levels despite lacking resources. Many students were fully present and active in their coursework. When outsiders stereotyped my students by asking, “Do they listen to you?” and “Do you just pass them through?” I told them story after story about my students reading and analyzing the nearly 600-page “Invisible Man” and writing poetry that rivaled published authors.

But there were some obstacles a rigorous curriculum and student engagement couldn’t overcome. Back in 2004, we only had one working computer lab for over 1,000 students. When we returned from winter break, bullet holes pierced our corridor windows — a glaring reminder of the violence in the neighborhood. Students had very few resources to deal with trauma or social-emotional learning as social work services were slim to none. I remember working with a student who lost her mother and younger siblings to violence over Christmas. She did not need rigorous instruction; we were ill-equipped to supply the emotional support she needed.

My second school, TEAM Englewood Community Academy, was a start-up school that opened because a low-ranked school was closed. Again, teachers and students worked diligently together to achieve district goals. Our students rarely met them, but not for lack of effort or focus. Bodies of research support the impact of poverty and segregation as legitimate factors of limited success on standardized tests. But whatever the factors were, for my students, they proved to be too much as the school would be labeled a failure. Last year, TEAM Englewood closed in much the same fashion as the school it replaced.

Presently, I teach at the 11th best ranked high school in Illinois. Lindblom teachers work diligently and are experts in their fields. We strive to provide a rigorous curriculum as much as teachers I worked with at Corliss and TEAM Englewood did. But there are two major differences at Lindblom. First, our students meet and exceed district, state and national goals. Second, they have to test in to get accepted into our school. As a selective-enrollment school, if a student does not meet the criteria of a certain score on a placement test before ninth grade, they cannot attend Lindblom. Yet our school, with our selective population, is ranked using the same measures against schools that are not selective. Simply put, the process is unfair.

 

 

Valerie Strauss posted a fascinating column about the biggest charter scam in history. 

She writes:

Late last month, San Diego officials indicted 11 people in what they described as a charter scam that defrauded the state of California of more than $50 million in education funds.

The indictment details a scheme in which an Australian man and his business partner in Southern California opened 19 charter schools throughout the state and then took the public funding the schools received to operate and used it instead for real estate and other ventures.

This post explains the scam that the 235-page indictment spells out in detail. This is long but worth the time to read to get an understanding of how easy it is, because of lax charter sector laws in some states, to defraud the public.

California, which has more charter schools and more charter school students than any other state, now has one of the most lax charter laws in the country, allowing these schools to operate with little if any accountability or transparency to the public.

The story was written by Will Huntsberry, a reporter for the Voice of San Diego. She received permission from the Voice of San Diego to repost it in full. It is an important story.

It begins like this:

Sean McManus and Jason Schrock created an online charter school empire that covered more than half the state of California, according to prosecutors and investigators for an outside charter school organization.

From the port of entry at San Ysidro up to Los Angeles, past the cliffs of Big Sur all the way to Santa Cruz; east through Raisin City, past the giant sequoias of Sierra National Forest, and down into the flat and quiet of Death Valley; south again to the Mexican border; and back to the coast — a person could travel unbroken through 20 counties that made up the lower half of their empire. An outpost of 14 counties encompassing Sonoma and Sacramento sits further north.

From this vast swath of territory, McManus and Schrock absorbed mind-blowing profits. Take just some of their 2016 tax returns (1): Their nonprofit charter management company A3 brought in $14.2 million in revenue. It spent only $3.6 million. Of the money it spent, $855,796 went to McManus and Schrock’s salaries. They appeared to be the only two employees, according to the tax return.

The profits climbed even higher in the months that followed, according to an indictment (2) filed by prosecutors. A3 Education and other companies controlled by McManus and Schrock ultimately brought in more than $80 million, prosecutors say.

Bill Phillis, former State Deputy Superintendent, watches over school spending and misspending in Ohio, in hopes that one day there will be equitable and adequate funding of public schools, instead of the current regime of school choice, waste, fraud, and abuse.

 

School Bus
Richard Allen Academy charter school audit cites fraud
The state audit cited illegal payments to board members and the treasurer, nepotism, failure to withdraw students, discrepancy between employee contributions to the pension systems and the amount the charter school paid to the pension systems. In addition, the audit indicates school and management company funds were comingled by which the company benefited at the expense of the charter schools. The charter school seems to benefit adults, not students.
The practice of charter companies benefiting at the expense of the charter school students is commonplace in the charter industry. Hopefully, in future audits, the State Auditor will take on the big boys in the charter industry.
Charter chains typically establish companies that provide consultant services, facilities and other services that charge the charter school outrageous rates. These schemes, of course, enrich the charter functionaries resulting in less educational opportunities for students.
William L. Phillis | Ohio Coalition for Equity & Adequacy of School Funding | 614.228.6540ohioeanda@sbcglobal.net| www.ohiocoalition.org
School Bus

 

The New York Daily News published an opinion piece attacking Bernie Sander’s call for a moratorium on charter schools, echoing the NAACP and Black Lives Matter. The article claimed that Senator Sanders was hurting children of color.

Carol Burris and I published a response in the same publication to the attack, which is included here. 

 

Peter Greene read an unusually annoying article in the Detroit News that showed just out of touch the authors are.

Michigan is a state that went overboard for school choice, thanks to former Governor John Engler and the billionaire DeVos family.

Michigan has dropped down to the bottom of NAEP, as scores have collapsed for every group.

Jeb Bush arrives to tell Michigan what they need to do is double down on their failed strategies. More choice. More testing. More accountability. More threats. More punishments.

Bush claimed that these strategies worked in Florida but they didn’t.As Greene notes, fourth grade score went up only because the state holds back third graders who don’t pass the third grade reading test. By eighth grade, students in Florida are at the national average.

Who aspires to be average?

Things are so bad in Michigan that average looks good. It is not.

 

As reported earlier today, online charter operators in California with multiple shell corporations have been indicted for embezzling more than $50 million for their charters. 

Also indicted were the leaders of the tiny rural school districts that authorized their charters as a way to collect fat fees for doing nothing. This feature is a serious flaw in the state’s notoriously lax charter law.

A tiny district can authorize a charter in Los Angeles or San Diego, then sit back and collect commissions. Efforts are underway now to fix the law but the California Charter Schools Association has fought all efforts at accountability.

A3 Education recruited small public school districts to sponsor the charter schools in exchange for oversight fees. Prosecutors say A3 enrolled about 40,000 students throughout the state, none of whom received any services.

The company that operated a network of 19 online-only schools is accused of paying sports leagues as little as $25 a student for information used for enrollment. School districts are funded by the state based on the number of students.

The students didn’t know how their names were being used, said San Diego County District Attorney Summer Stephan, calling them victims…

The Dehesa Elementary School District, which has only about 150 students east of San Diego, authorized several charter schools with oversight for 20,000 students, Stephan said. The $2 million in oversight fees collected one year was more than the district’s annual payroll.

Nancy Hauer, Dehesa’s superintendent, was among 11 people charged in the case. Other defendants were employed by A3 and its charter schools.

The Dehesa school board said it couldn’t comment on the charges and vowed to fully cooperate with investigators. Hauer was not available to comment.

“The Board of Education was stunned to learn about the charges, and we have engaged legal counsel to review this matter and any possible implications for district operations,” the Dehesa district said.

The grand jury returned its indictment May 17 after hearing six weeks of testimony from more than 70 witnesses.

A spokesperson for the charter lobby insisted that it did not approve of “bad actors” but has used its vast resources to kill every legislative effort to amend the law.

The California Charter Schools Association said it raised concerns about A3 more than a year ago with the state education department and urged an investigation.

“To be clear, there is no room for bad actors and irresponsible authorizers in California’s charter public school movement,” said Myrna Castrejón, the group’s president.

As we say in Brooklyn, if you believe the lobbyists who have defeated all efforts to stop self-dealing, I have a bridge to sell you.

 

With the encouragement of the super lobbyists of the California CharterSchoolAssociation, the California Legislature continues to block any meaningful reform of its lax charter law, even as the news breaks that online charter operators were charged with scamming more than $50 million from taxpayers.

Peter Greene calls this one “a spectacular charter scam.” He is right. We have seen plenty of garden-variety scams and multi-Million dollar charter frauds, but this one is the biggest yet!

Morgan Cook and Kristin Taketa report in the San Diego Union-Tribune (a newspaper that supports charters):

Using in-depth knowledge of California education funding, charter school regulations and deceptive business disclosures, an Australian citizen and his partner in Long Beach orchestrated a multi-year conspiracy to fleece taxpayers out of more than $50 million, prosecutors say.

Sean McManus, 46, an Australian who operated charter schools in California, and another charter school operator, Jason Schrock, 44, and nine others were named as defendants in a 67-count indictment announced this past week by the San Diego County District Attorney’s Office.

Prosecutors say McManus, Schrock and others enrolled thousands of students into online charter schools, often without their knowledge, and collected millions in state funds using student information obtained from private schools and youth athletic groups.

This criminal enterprise funneled millions of taxpayer dollars into private bank accounts of the defendants,” said District Attorney Summer Stephan.

Eight of the 11 co-defendants have pleaded not guilty and denied the allegations. Two more are expected to be arraigned June 6….McManus is at large, possibly in Australia, prosecutors said. A San Diego Superior Court judge issued a $5-million bench warrant for his arrest and froze the accounts of charter schools, related companies and individuals related to the alleged conspiracy.

A reader who calls himself “Francisco” has commented recently that there are just as many frauds in public schools as in charter schools. Hey, Francisco, can you top this?

Peter Greene responds:

The twitterverse rebuttal has been, “Oh, yeah. You’re just focusing on charters. I’ll bet we could public school scams just as bad.” Maybe. But the oversight provided by a locally-elected board and mandated transparency of financial dealings would make it pretty damn hard. To pull off a scam of this magnitude, you need to wide-open barely-regulated low-oversight world of charters.

As Greene points out, in what world is it possible to buy and sell schools like franchises other than Charter World?

 

 

Jack Schneider, a historian of education who often collaborates with Jennifer Berkshire, analyzes the fading allure of charter schools. After years of claims that they would “save” public schools and poor children, the public has given up on them. Why? They have not delivered, and the public gets it.

For most of the past thirty years, charters seemed unstoppable, especially because their expansion was backed by billions from people like the Waltons, Gates, and Broad, as well as the federal government. But they have not kept their promises.

Today, however, the grand promises of the charter movement remain unfulfilled, and so the costs of charters are being evaluated in a new light.

After three decades, charters enroll six percent of students. Despite bold predictions by their advocates that this number will grow fivefold, charters are increasingly in disrepute.

First, the promise of innovation was not met. Iron discipline is not exactly innovative.

Second, the promise that charters would be significantly better than public schools did not happen. In large part, that is because the introduction of charters simply creates an opportunity for choice; it does not ensure the quality of schools. Rigorous research, from groups like Mathematica Policy Research and Stanford University, has found that average charter performance is roughly equivalent to that of traditional public schools. A recent study in Ohio, for instance, concluded that some of the state’s charters perform worse than the state’s public schools, some perform better, and roughly half do not significantly differ.

Finally, charters have not produced the systemic improvement promised by their boosters.

Competition did not lift all boats. In fact, competition has weakened the public schools that enroll most students at the same time that charters do not necessarily provide a better alternative.

Schneider does not mention one other important reason for the diminishing reputation of charters: scandals, frauds, embezzlement, and other scams that appear daily in local and state media. A significant number of charters are launched and operated by non-educators and by entrepreneurs, which amplifies the reasons for charter instability and failure.